When Things Don't Add Up: Getting Control of Your Loved One’s Finances When They Have Dementia

My experience of finally getting access to my parents' finances and getting a durable power of attorney began with a frantic call from my mother. 

It was not the first I'd experienced, but the first of this kind. "Laura, I need you to go to the bank and put money in our account right now!" she said.

I found this alarming, but not for the reasons you may think. First, it was the use of my given name, Laura: My folks and extended family always called me by my nickname, Lori. "Laura" was reserved for when I was in trouble as a kid. The second reason was that I was certain they were not out of money. 

"Well, Mom, why do you think that?" I asked.

"I called the bank, and it said something was declined, so we must be out of money!" Let me translate this: Apparently, Mom had been calling the phone banking line (not just now and then but daily) to make sure they had money and that their bills had been paid. Had I known this, I would have intervened sooner because...

Not-fun fact: Worrying about running out of money or having trouble managing finances is a sign of dementia.

After hanging up with Mom, I stopped by their bank and explained the situation to the teller. She was surprisingly sympathetic. I said I knew she could not tell me any balance information or anything like that, but asked if she could at least check to see if it looked like fraud had occurred, or if they were overdrawn. And she did! Here's what she learned: My Dad, whose dementia was far worse than Mom's, had tried to swipe his ATM card at the gas station, and it was declined — not due to lack of funds, but to him removing the card before the transaction was complete. He apparently did it several times. The only thing more concerning than Dad using his ATM card anywhere was that Dad was. Still. DRIVING.

I suddenly recalled hearing that worrying about money is one of the key indicators of dementia — hence the alarm bells going off. But this call also offered me the rare opportunity to ease my way into a strictly off-limits topic...

How to talk about and take control of aging parents' finances. 

Here's how I managed it: "Mom," I said, "it could be that you're not actually out of money but something else is happening. If you want, I can go up there and find out."

 "That would be great," she replied. Then I suppose I baited a hook, for lack of a gentler term, by saying, "Oh but I don't think they will talk to me because I'm not listed on your bank account and it's illegal for them to tell me anything. Maybe you and Dad could add me so I can straighten this out." I held my breath. Not a second passed before Mom replied, "Oh, that would be great honey." 

I was so relieved — and also incredibly sad. Here was my once razor-sharp-minded Mom, who for a lifetime easily managed the family's finances and for a while even kept my company's books, asking for help. And knowing I had out maneuvered her to accomplish this, well, I still feel guilty about that.

Yes, Mom you DO have money in your account. 

If you are already on your aging loved one's finances and accounts, then kudos to you! If not, then 1) welcome to the club and 2) take my advice and be on the lookout for an opportunity to get yourself added to any and all financial accounts so you can lean in when the time comes.

I made an appointment with the accounts manager at my parents' bank, and explained I was bringing my folks by so I could be added to the account — and I explained why. She suggested I try to get their permission to be added as an owner of the account, not just a signer. I had no idea about the difference and remain very grateful to her for pointing that out. 

What is an owner vs. a signer on a bank account?

Once at the bank, Mom, Dad and I were greeted by the incredibly kind accounts manager. Thankfully, they gave her permission to add me to their accounts as an owner versus a signer. As the banker explained to them, being an owner meant I could do all the same things that they could do: write checks, withdraw money, pay bills and even close accounts when the time came (she left that part out of the explanation) whereas a signer can only sign checks — do NOT opt to be just a signer. My folks agreed to me being an signer owner that day, but I had another item on my agenda: to get a Durable Power of Attorney (DPOA) signed and notarized for each of them. 

What is a Durable Power of Attorney (DPOA) and why do I need it? 

It's a legal, notarized document that gives someone else the authority to act on your behalf, even if you lose mental capacity. Don't confuse this with the simpler Power of Attorney, or POA. Here's the difference: A general Power of Attorney only operates while you are still coherent and mentally capable and automatically expires upon incapacity or death. A Durable Power of Attorney remains operational upon incapacity and expires upon death. It is easy to find these forms to complete yourself if you don't have a family or elder law attorney — that's what I did. I wish I had contacted an Elder Law Attorney, however, as it would have saved me time when it came time to sell my parents' home. More on that in another blog.

 After we'd signed the paperwork adding me to my parents' accounts, I casually pulled out a file folder with two Durable Powers of Attorney and said to my folks, "Oh, I forgot, I need to have you sign these two documents so this nice lady can notarize them. They are Durable Powers of Attorney for each of you, so that if there is another emergency like with a bill or something, I can help straighten things out." Dad immediately said, "good idea." I held my breath as mom mulled it over, and finally agreed.

The Durable Power of Attorney is key to managing your aging loved ones' affairs — for me, it enabled me to cancel my parents' newspaper, change their phone service, close their gym account, cancel credit cards and cable and AAA and so on. 

Tip: Make sure the bank will have a notary in office the day of your appointment, so you don't waste a trip. 

Now that I could see how much money they actually had ... I was surprised to see it wasn't more. Luckily for them, they owned their home outright so that would help get them into some sort of assisted living when the time came. I could see where they spent their money — so much on fast food it was staggering because I was ordering and having groceries delivered weekly for them.  

Taking the reins and paying the bills. 

My Dad, a once-brilliant and computer-savvy engineer, had long lost his ability to log in and manage their finances online; Mom had never learned. So now that I had access, it was easy for me to set up new logins and start paying their bills online. What was NOT easy was to find out what bills they had. This was because unlike my Dad's still-tidy office complete with file folders labeled "mortgage" and "insurance" (thank you, Dad), Mom's filing system consisted of rubber-banded stacks of envelopes shoved in a kitchen drawer. I spent one morning sifting through these, and the stacks of mail in the kitchen, to get a handle on what the monthly expenses were. 

I discovered that that Mom had paid the cable bill twice and missed paying a couple others. And the HOA was three months behind. I set up autopay and online payments for the bills, and my folks were happy to be relieved of that worry. Sounds simple enough until you realize this entire blog outlines all the work it took to get to that point. 

When to loop in your loved one's financial advisor.

Mom's paranoia about running out of money continued and was on full display when she started talking about taking out a reverse mortgage so they could pay their bills. This was a red flag moment because they didn't have many bills. And they sure could not remain in their home — they could no longer cook, clean, manage finances or medication, and more. I knew this was not the right answer for them. But Mom didn't want to listen to me, or even to my husband Tim, a.k.a. the anointed one who could do no wrong. So, I took a leap of faith and suggested that maybe we could talk to their financial advisor about a reverse mortgage and get his opinion? I knew they trusted him, even if they couldn't recall his name.

Whether it was due to dementia, old age, or both, neither of my parents could remember the name of their financial advisor. But through a couple of conversations and a bit of internet searching, I was able to figure out the name and location of the office. I phoned and pled my case to the compassionate office manager, then emailed over the two DPOAs. She promptly scheduled a call between me and the investment advisor, during which I explained that 1) both parents had dementia which had worsened during the COVID-19 shutdown, 2) they couldn't tell me how much money they had in the account, and 3) my Mom was hell-bent on a reverse mortgage. I swear I could feel him cringe over the phone.

Ask questions, let the advisor answer, and be prepared for what you hear.

My husband and I arrived with my parents to the meeting. The advisor was very kind and spoke with respect to each of my parents. This was important because it was their account, after all — they were the clients. He started by restating the reason we were there: to add me to their accounts and to discuss their finances. Mom and Dad agreed, so he shared the details of the account. I was surprised to see that their balance was far lower than I thought. He explained that they had been making withdrawals almost every month, which negated any earnings they may have gained. Then I brought up Mom's interest in a reverse mortgage and asked his opinion on that. He explained the basics of how it worked...and advised against it. My parents trusted him, so they agreed to drop it. Papers were signed and I was now in control of that account.

The lesson? If your loved one has dementia, get added to their accounts now vs. later.

My motivation for taking control of my parents' finances? I could see the writing on the wall: their ability to live independently had come to an end. My Dad could see it, and finally so could Mom. Maybe your loved ones with dementia are agreeable to adding you to their finances. If so, that is fantastic ... for F's sake, do it TODAY. However, if your parents are as reluctant and fiercely independent as mine were, then you must find and seize your moments to have these conversations and act on them — fast. 

Look for your helpers.

The banker. The office manager. The financial advisor. These empathetic people were critical to helping me tackle this difficult yet essential task of gaining access to my loved ones' finances. And it wasn't just because they were kind: it was because they had experienced the same thing that I was going through with their own parents, grandparents or spouse. Compassionate people are everywhere. You just have to ask them for help, then let them do it.